Wednesday, December 2, 2009

Is the call center industry on the cusp of a paradigm change?

Tim Montgomery, a leading call center consultant recently interviewed me for an article in Connections Magazine.

TM: I’ve been working in this industry for years and we keep trying to solve the same challenge – improving how the agents interact with customers. Is there something that all call centers share regarding this?

DA: Once you get past all the attempts to get the customer to self-serve through web self-help, on-line communities, IVRs, etc, every call center on the planet is struggling to reduce between agent variation. Some agents are empathetic, some can be downright surly. Some are very experienced; others are brand new and are not prepared. Some are hard to understand and some speak very clearly. Some are focused and listening while others are texting their friends during the call. Some are conscientious and try to do everything right and some are bored and frustrated and only do the required steps if they feel like it. Some are quick and some put you on hold numerous times. We all know this because we have all experienced it.

But these are not just anecdotal observations; there is research to back this up. A 2005 Harvard Business Review article titled "Manage Your Human Sigma" cited a study of 5,000 customer service agents, finding that the customer’s experience still depends almost entirely on the agent who takes the call. According to the study, based on post-contact interviews, the bottom ten percent of agents produced four negative encounters for every three positive ones -- that's almost a 60 percent defect rate. But perhaps even more disheartening, the top ten percent had a 14 percent defect rate. In other words, according to customers, one out of every seven encounters with the very best agents was negative.

TM: Why haven’t we made more progress on this front?

DA: The primary reason is that there is no sense of urgency about the relatively poor and always inconsistent levels of quality. CEOs don’t hold their call center leaders to the same standards they hold their manufacturing leaders to. If they did, I believe every call center leader would be summarily dismissed.

A kind of learned helplessness hangs around call centers. No one would tolerate it if the quality of their car depended on the plant it was built in. Yet, consumers, call center leaders, and every level of management tolerate the fact that the experience the customer has is a function of the agent who happens to pick up the phone. It is like seeing the long line at the post office and shrugging your shoulders; we have all become inured to poor call center service.

Related to this is what the money for capital improvement projects in call centers is really being spent on. Though no one really likes to admit it, I think we all know that the real focus in call centers is cost reduction. Some of the most popular initiatives over the last several years…off-shoring, VoIPing, online communities, agents handling multiple chats, speech-enabled IVRs…are all cost-reduction focused initiatives.

I have a friend who is a Director of Human Resources at a well known, hi-tech company. I asked him if the performance of the call centers is discussed during the business reviews. He said, “Yes, for about four minutes. The only question the SVPs ask is whether the managers will be able to keep the service costs down. They never ask about the level of CSAT or the Issue Resolution rates.”

TM: Totally agree and have seen this firsthand. Can you expand on this a little from the executive’s perspective – they get lots of reports that show improvement – what are they missing?

DA: I think the first problem is that leaders don’t know how to look at the data they are getting. There is too much use of Red-Yellow-Green in call centers today. A measure will be below standard…or Red…this month and everyone runs around wringing their hands and then it is green next month and they take their eye off it. We chase our tails every month, but no one steps back to look at the long term trends.

What leaders should be doing is taking all their output metrics…cross-sell percentage, Issue Resolution, AHT, etc…and graphing them over time on a control chart. There are only three possibilities: the measures are getting better, getting worse, or treading water.

There are few call center leaders who can put up year-over-year charts of key call center measures that show continuous improvement. That means that they are at best treading water and in many cases they are actually getting worse. If this is true then it means, de facto, that what those leaders are doing to improve their agent output measures is not working.

TM: I am surprised to hear you say that. There have been a lot of new technologies in the market to help call centers with this issue. And, we’re now sending managers to training to control the outliers. Don’t you think we have made progress?

DA: We have been trying to fix the between-agent variation problem for forty years. The industry has and continues to spend billions of dollars every year on this problem. Some try to build and maintain scripts. Some build knowledge bases and search tools for the agents to try to find answers. Some spend money on incentive plans, just trying to get agents to do what they are supposed to do. Some centers do all of these things, and of course everyone records, monitors and coaches.

We visited an offshore center the other day that tied smiley-faced balloons to the agents’ cubes, thinking that this would make them a little happier and that would make them nicer to customers. Can you imagine if they tried to improve quality at a jet engine manufacturing plant by tying yellow balloons to the tool benches? And what comes after yellow balloons…a lucky rabbit’s foot in everyone’s pocket?

One-agent-at-a-time approaches haven’t worked for forty years. If they did, we wouldn’t have the quality and between-agent variation problems we have today. Can call center leaders really look their CEOs, CFOs and CapEx committees in the eyes and with a straight face tell them that if they just spend a little more money on new recording equipment, or monitoring bells and whistles, or between call in-seat training, or improved knowledge-base search tools, or a Web-based incentive plan or some other fix-each-agent-one-at-a-time approach, then they'll see the promised improvements?

It would be the definition of insanity to think these methods are going to fix call center quality problems any time soon.

TM: But why? Why are the call center improvement approaches to reduce agent variation not working?

I think the problem here is that a flawed mental model for how to increase service quality pervades the industry. Because the industry’s improvement model is wrong, the quality never systematically improves.

The mental model goes like this: The performance of my center on any output metric like Customer Satisfaction or Issue Resolution or Compliance is the sum of the weighted averages of each agent. So, if I can improve the performance of each agent, my center-wide output measures will improve. Given this belief, most centers rely, some almost exclusively, on occasional monitoring and occasional coaching to try to improve the performance of each agent.

This dominant framework is true in theory, but not in practice. Coaching could help an individual agent improve. But given the high turnover that all centers face, center-wide metrics never improve and between-agent variation remains high because every day part of your process improvement investment is quitting and walking out the door.

TM: I read that you said the industry is "sitting on a huge mass customization opportunity." As a 20-year student of call centers, this is news to me. What are we missing?

DA: The benefits of mass customization are obvious: you give your customers more of what they value so they keep coming back to you -- that's the customization -- while raising the quality and lowering the costs of fulfillment by finding things you can standardize -- that's the mass.

Apply this thinking to the call center industry. Conventional thinking says "Oh, every incoming call is unique, there's no opportunity for standardization." Okay, but for a given type of call, large swathes of each of those calls are exactly the same. Can’t we standardize those parts and just vary what the customer wants or needs us to vary? I mean, car buyers care about color, not about bolts, so car manufacturers use standardized bolts and other sub-assemblies across models.

Look, in call centers, customers want to talk to a live agent to get their unique situation addressed, to get empathy or a solution that eases their suffering. We should absolutely deliver that. That is what they care about and want. But do they care how a required disclosure is provided to them, or how the diagnostic questions to troubleshoot their problem get asked? Of course not.

The reason it is so essential to start seeing the opportunities for mass customization is because to not see them, leaves us where we are today: each incoming call unique as a snowflake, no process defined for the agents to execute, and the call replete with sub-optimizations:

Don’t automate the greeting and customer identification steps to ensure it is branded and done correctly every time. Let’s monitor and coach them and then hope, that’s right, hope the agents remember what we told them to do and hope they decide to do it, and hope they do it right.

Don’t prerecord the disclosures; hope the agents read it word-for-word without accent issues interfering with your customers’ understanding.

Don’t use technology to ensure the right cross-sell offer is made at the right time, every time; hope your fancy variable comp plan counteracts the unyielding pressure we put on the agents to reduce their talk time.

Oh and certainly don’t error-proof the step reminding the customer to “remove any software before returning the unit” so that it can’t be skipped; we don’t need to care about that since the angry letters to the CEO get handled by another department.

TM: I’ve always been a big fan of coaching – are you saying that we’re wasting our time?

DA: Let me be clear. It is not that coaching can’t help an individual agent improve. If a particular agent wants to do a good job and you tell them how, there is a good chance they are going to try to use that information to perform better. My point is that coaching alone is not going to get us to a high level of quality. First, we have been doing it for forty years and we still have incredibly inconsistent quality. As I said, this is in part due to the typically high turnover that plagues the industry. But it is also because coaching is a weak method of process improvement because it is based on hope. You hope the agents remember what to do and do it.

TM: Okay, you’ve piqued my interest. Can you give me an example of what else we could do?

DA: Sure, if you look outside the call center industry you will find lots of them. Toyota is the absolute paragon of continuously improving quality. If you went into one of their plants and ask them how they achieve their stunning levels of quality, do you think they would tell you that the secret is that we videotape workers and coach them one-at-a-time a couple times a month? The very thought of this is laughable. If the masters of year-over-year quality improvement and cost reduction don’t rely on one-worker-at-a-time approaches to quality, you have to wonder why call center leaders have it as their go-to strategy.

What do they do instead? Their focus is, first and foremost, on continuously improving the process and then training the workers on how to execute that process.

TM: What is it about the Japanese approach, in particular Toyota, as you say, that impresses you for call centers?

DA: An easier question to answer would be, “what doesn’t impress you about Toyota’s approach?” From one small California dealership in the late 1950s, they are now the number one car manufacturer globally. Not only is this a stunning increase in market share, but also Toyota's operating margins are three times the industry average. Until the recent market carnage, Toyota's stock was up over 200 percent since the early 1990s. GM is now bankrupt.

Toyota builds great cars. How do they build great cars? They have a systematic approach for building high quality cars. They codified it in something known as the Toyota Production System. And although the call center industry has answered untold trillions of phone calls in the last 40 years, there is no documented approach for how to systematically improve call quality.

This is what the call center industry needs to take away from what Toyota has done. We have to develop a repeatable, systematic approach for improving call handling and we have to teach it to everyone in our centers.

TM: I’ve worked with a lot of companies that struggle with getting agents to read things like disclaimers and policies consistently. I can see how prerecording can eliminate some of that tug of war between agents and leaders. Tell me more about your product and how it uses the recordings to drive the process?

DA: Our agent-assisted voice product, ProtoCall, uses prerecorded audio and we have used it on millions of phone calls in domestic, near-shore and far-shore centers. It is the foundational technology that allows centers to move from an agent-centric to a process-centric approach.

We start by breaking down incoming call volume into call types. Then we assume the call is going to go in a straight line and we exactly define, just as they do in the Toyota Production System, what we want the agents to do in their systems and say to customers. We then make it easy for the agent to execute the defined process by pre-programming system actions and pre-recording audio. The result is an agent live on the call listening to the customer and navigating the call using the paths we built. If the call goes in a straight line, the agents may never have to break-in with their live voices. But if the customer asks a question that is not part of the call flow or if the customer wants to make small talk or needs a little extra hand-holding, the agent can take over the call.

TM: How does this support improvement and the reduction of between-agent variation?

DA: It helps in so many synergistic ways you can’t believe it. All the agents are following a single process. They vary it only as they need to as opposed to varying everything every time. Resources are focused on studying and improving the process first and the agents second. When a single improvement is made to the process, all the agents are instantly performing better. We can error-proof steps so that it is almost impossible for the agent to skip them. If the agents quit the performance doesn’t suffer because the expertise is baked into the pre-built process. And all this is accomplished without team meetings, laminated cards, monitoring sessions and off-phone coaching.

TM: What about the customer hearing multiple voices during the call?

DA: I understand this question, but it is also odd to me. It’s odd because the customer hears multiple voices now…there is an IVR voice and the agent’s voice and sometimes even a text-to-speech voice. Also, in exchange for all the benefits I just mentioned, wouldn’t your customers hearing one more voice be a very small price to pay?

But that aside, an approach like ours is brand new and I understand the concern. We have handled millions of phone calls and the overwhelming majority of customers don’t notice or at least never comment about hearing multiple voices. If they do notice or ask, the agent just says “I am using software to make sure the information I communicate is 100 percent accurate and easy to understand. Is that OK?” Not only do the customers not complain about this, they think it is kind of cool.

TM: Can you talk about some of the benefits you have observed using this approach?

I mentioned that customers don’t complain about hearing multiple voices. But we are not solving for customers “not complaining.” We're about making the call wildly better for all the stakeholders, and we think we have been able to do just that.

Agents love it. Why? Because we have made their jobs less stressful. They don’t have to talk as much and they know they are getting the process right. They are more relaxed and less fatigued at the end of the day. We have not seen a turnover effect yet, because we cannot get our clients to do the study, but we are sure it is there.

Customer Satisfaction has been increased because accents no longer ruin the interaction. Process adherence and compliance have both been increased to the 99.999% level because, just like they do in manufacturing, we are building the correct process and making it easy for the agent to execute it. So customers are getting the right process in a voice that is easy to understand.

Costs have been reduced because by engineering the call, we have been able to systematically reduce talk time and after call work. As an example, we reduced the average talk time on a cell phone activation call from over ten minutes to just over six our…a forty-plus percent reduction in AHT. After call work went from over 90 seconds to 10-15 seconds. No center operating today could accomplish this even if they assigned a quality monitor to every agent.

TM: I’ve seen the product in action and now have a better understanding of “why” it’s going to change the way we look at call center process improvement. But you mentioned that your approach is new. When do you think the rest of the world is going to catch on?

DA: Our ProtoCall product is new -- no one is doing what we are doing and many don’t even think what we are doing is possible. It will take time. Think about ATMs, self-service kiosks at airports, and IVRs. These were also looked at warily at first but are now quotidian.

We may be starry-eyed entrepreneurs, but we feel the widespread adoption of our approach is all but assured. First, our proof-points are mounting. We already have a Telco proof-point and two financial services proof-points. Agents using our solution were dramatically superior to agents who handled the calls without our software. In addition, one of the largest technology companies in the world is piloting ProtoCall. Though we have just begun, their management is stunned at how much more effective our approach is on tough tech support phone calls.

But we were confident before these recent proof points came in. When your product is cutting the Gordian Knot on a forty-year problem, when it delights agents and results in less frustrated and more satisfied customers, when it drives dramatically better financial results while not limiting the flexibility of nuanced responses to customers, you know down to the bottom of your socks that at some point even the most risk averse, change-resistant leaders are going to have a hard time sticking with their we’ve-always-done-it-this-way approach.

Tuesday, October 6, 2009

The Future of BPO and the Single Question that will Determine the Winner

I don’t have a crystal ball and I don’t know who will be the largest and most wildly, yes wildly profitable, Business Process outsourcer in the next five or ten years, but I do know the one question the winner will have answered to get themselves there. Before I tell you, I want to start with a story that captures the current, dismal state of the BPO industry.

A friend of mine, Alan Madison, who used to run Customer Service for H&R Block, was outsourcing a huge chunk of business. He conducted due diligence with some of the biggest brand names in the BPO industry. During the interview, he told them: “I have X million minutes of calls that I have been doing myself with these levels of performance metrics for AHT, C-Sat, Issue Resolution, etc.”

And then he asked a simple question, “If I give you this business, what are you going to do to make me better?”

While this is a completely reasonable question, can’t you just see the sales guy or gal fidgeting in front of the room after it was asked? They were squirming because they had no real answer. In fact, Alan told me each of these leading outsourcing firms…the best of the best…all only gave one answer and it was the same answer from each of them. They all said, “Well, we monitor and coach agents.”

Monitor and coach agents? Huh? Alan monitored and coached his agents when he handled all his own calls. Were they saying that their monitoring and coaching procedures were better than Alan’s? Were they trying to argue their monitoring and coaching process was better than the other outsourcers? Were they trying to do either of these things with a straight-face?

If you have outsourced any of your business, as I have in the past, you know this: there is nothing that differentiates the top tier outsourcers from each other. They all have broad geographic footprints. They all hire agents using assessments designed by industrial psychologists. They all have the latest and greatest technology stacks. And they all, apparently, improve your outputs by monitoring and coaching agents.

Other industries are not so me-too. There are a lot of companies that make cars, for example, but no one makes cars with as much efficiency and quality as Toyota. As good as Toyota is, they don’t do it all by themselves. They rely heavily on outsourcers, who have achieved their own stunning levels of quality and productivity.

The performance of Toyota’s suppliers is no accident. Toyota has completely changed the game for how OEMs work with their suppliers to ensure these kinds of results. And these are the changes that are coming in BPO industry.

To better understand the dramatic shift that is coming, let me give you a little of the history on vendor-supplier relationships. As recently as thirty or so years ago, manufacturing in the United States had a brass-knuckles approach to negotiating with suppliers. They would give pieces of the business to multiple vendors and pit them against each other to get the lowest possible price. They had contracts that spelled out every detail of the relationship. Then when their outsourcers were punch-drunk, they sent procurement in to squeeze out the last drops of margin. Quality and other performance variables often suffered. There was no quarter. It was "Us & Them" in all its glory.

Then Toyota changed the game. They didn’t spread their business out; they concentrated it at one or two suppliers. This was a huge windfall of revenue for these suppliers to spread their fixed cost over and to invest against. Moreover, Toyota didn’t squeeze the last drops of profitability out of the vendors. They asked their suppliers to open their books because they wanted to ensure they were allowing their vendors to make a fair profit. In some cases, they paid them more than they had in the past.

But in exchange for this windfall of revenue and profitability, the bar went up dramatically on expected performance. Smaller, more frequent deliveries, billing changes, and higher quality standards and drastically improved cycle times were now required.

Not only did the bar go up on current period performance, but the expectation was set that quality and productivity would continuously improve: the vendors were expected to experiment and deliver Year-over-Year (YOY) improvements. The gains that the suppliers were required to achieve were shared: Toyota got lower costs, the suppler go higher margins.

Turning to our own industry, the typical client-outsourcer relationship is closer to the old US manufacturing model than it is to the Toyota model. Clients today typically don’t concentrate the business with one or two outsourcers; they don’t ensure they are making a fair profit; they don’t put people permanently on site, teaching them better ways to improve results; and they don’t hold them accountable to hit and continuously improve performance measures.

The way Toyota works with their suppliers are proven best practices for achieving YOY improvements and they are coming soon to a BPO near you. The firms that are going to win and make real money in the new BPO world are going to be the ones who can demonstrably and continuously improve their clients’ output measures.

By this definition, no one is winning today. Outsourcers, unless they are starting from a really terrible place, are not showing dramatic YOY improvements in quality, productivity and customer satisfaction. No one is delivering YOY improvements and I can say with absolute confidence, the current “we monitor and coach agents” approach will never deliver the level of improvements that will soon be required.

The way winning BPOs are going to deliver YOY improvements is the same way the manufacturers did. They are going to move away from the management of the worker and focus on the management of the process.

This is not a theory. The effectiveness of a process focus has been demonstrated on millions of phone calls. As opposed to the folly of coaching each agent one-at-a-time, the agents are given a process to execute using an agent-assisted voice solution. With a single process for the agents to execute, the primary improvement focus is on the process, not on the agent. Any changes that are made instantly improve the performance of all the agents. Through this approach, we have systematically lowered Average Handle Time and After Call Work, improved compliance and cross-sell, and maintained or increased C-Sat.

An outsourcer armed with this kind of process-centric approach would easily be able to produce chart after chart of continuously improving client outputs. This would enable them to capture a new prospect’s initial business and even more of it over time because they would be out performing the other outsourcers the client is using. It would also enable them to increase their margins because the contract would be structured so that any gains the outsourcer achieved would be shared between the client and the outsourcer. A dramatic increase in both revenue and margins…isn’t that how we define winning from a shareholder perspective?

And results like this will be almost axiomatic because the winner will be able to definitively answer the one simple question that no outsourcer can answer today:

“What are you going to do to make me better?”

Tuesday, May 19, 2009

Definition of a World Class Call Center? Not as bad.

There was a recent discussion on LinkedIn on what constituted world class customer service.  Was it Apple?  Zappos?  Both have fiercely loyal customers and many do report experiencing a WOW factor when they call in.
While WOW is good, I felt the discussion did not focus enough on accuracy.  In a kind of Maslow's Heirarchy of Needs, I believe a center would be better served getting the basics right (right steps to ID the customer, right diagnostic steps, right disclosures, right offer, right price, right system updates, etc) before worrying about agent warmth and empathy and any kind of WOW factor.

But go into centers and ask to see a chart of error rates on some of those dimensions listed above. They don't exist. ( ). A call center leader for a division of a high tech company was lamenting that they could not get their thousands of outsourced agents to 1) consistently diagnose a high volume tech support call correctly, 2) they couldn't get those agents to consistently check the warranty to avoid unauthorized returns, and 3) they could not get the agents to remind the customer to remove software before returning the unit since they would never see it again, which resulted in angry letters about missing software to the Office of the CEO. Did they or their outsourcer track any of these sub-process error rates? They did not. (See Call Center Hidden Factories )

Not only aren't error rates tracked, but the very process of making process changes...which happen constantly in call a complete joke (see Inside Jokes essay ). As an example here, a client of ours went to the Philippines to listen to their outsourcer's agents take calls. In ten out of 10 calls they listened to, the agents gave the wrong price for a service that recently changed. Our client asked the management, how they communicated the change and they said what any call center management team would say: we had team meetings, we sent out emails, we did chair-drops, we monitored some phone calls and did some coaching. We have to stop kidding ourselves about our ability to change agent behavior in any kind of timely fashion (see Wag the Dog: Why are we letting agent traits control call center outputs? )

I am not sure what the call center definition of World Class is, but I do know this: whether outsourced or in-house, call centers make too many errors every day (see Do Call Centers Need to Carry Malpractice Insurance ). This is not just a few aberrant centers. The high error rates we observe are actually endemic to the call center service delivery model that most centers follow...unaided humans are not very reliable to begin with (3 Sigma at best), let alone the mostly young, entry level, low-paid employees that we staff our centers with, who (in normal economic times) are turning over at a stratoshperic rate because the jobs, in general, are stressful, who, during their short stays, don't get enough training, only occassional monitoring and even less coaching. (As an aside, coaching is the go-to method for improving call centers, but this go-to method is of questionable ROI given the high turnover (see The Futility of Call Center Coaching )). With this as the typical Call Center M.O., is it any wonder we observe the quality problems that we do?

Until centers figure out how to support the intelligence and empathy of humans with the reliability of automation and blend the two together seamlessly, the high error rates in contact centers will continue and world class will only mean "not as bad."  

Friday, May 15, 2009

Wag the Dog: Why are we Letting Agent Traits Control Call Center Outputs?

I stumbled on a piece of research about how agent traits affect output measures of performance (When Conscientiousness Isn’t Enough: Emotional Exhaustion and Performance Among Call Center Customer Service Representatives).

Here is my high-level summary of the results of the study…if you use measures of conscientiousness to screen/hire, it will, in general, improve your center-wide quality scores.  However, when the agents start to get burned-out, (because of the fact that you hired agents that were more conscientious) your productivity will be even more sharply reduced. 

There are however broader implications from this study.  The paper highlights how agent conscientiousness and agent burnout affect performance.  Well, raw intelligence affects performance and degree of domain specific content knowledge affects performance and distractibility affects performance and personality affects performance and "thickness of accent" affects performance and mood affects performance and motivation affects performance and on and on and on. 

Now of course there is nothing wrong with studying employee traits to find out the ones that have the biggest effect on performance and then using that information to design selection tests to try to raise the level of performance in your centers by raising the presence of that trait.  This approach has an unassailable track record of success (see Take the Guesswork Out of Hiring) and this approach has been the bread and butter of Industrial Psychology consulting firms large (see Personnel Decisions) and small (see All About Performance) for decades.

But the bigger question is this: why are call center leaders leaving their outputs at the mercy of so many variables they can’t control?  And the industry’s attempt to deal with the challenge…to attack the endless drivers of agent variation (motivation, knowledge, conscientiousness, mood, intelligence, etc) with one-off efforts...a new selection test here, a rah-rah team meeting there, free pizza and doughnuts, occasional coaching a fool’s errand at best. 

Agent output metrics in the call center industry will be permanently hog-tied at an embarrassingly low level until we can figure out a cost effective way to reduce the effects of between-agent variation. Selection tests help reduce this variation, but they are not enough.  Standardizing large swaths of our agents’ process using agent-assisted automation is not only the most effective and cost-efficient approach, it is the only sane solution I have seen to date.

Tuesday, May 12, 2009

Benchmark Error Rates for Contact Centers

A question was recently posted to a Linked-in User group about standards and benchmarks for call center error rates. I penned a response along these lines.


First, the direct answer to the question is there is no goal, standard, or target for acceptable error rates in call centers.  Acceptable error rates in call centers seem to be a function of what the agents are doing and what the consequences of an error are.   (For more on this, see Does the Call Center Industry Need Malpractice Insurance?)

Let's consider a situation in which we change the price for a service and we decide to check the agents' accuracy in giving the new price.  On the day after the price was changed, there is no way the agents will quote the right price 100% of the time.  What would be the acceptable error rate?  75%? 80% Would 45% be OK?  What would be acceptable two months after the price change?  90%? 95%? If the agents get this wrong it is unfortunate, but not the end of the world and most call center leaders seem willing to tolerate mediocre performance around process changes. (For more on the sloppy process changes in call centers, see Inside Jokes)

On the other hand, what would be an acceptable error rate for a disclosure on an insurance sale that is required by law or a disclosure on a credit card transaction that is also required by law where in both cases there could be federal monitors listening to calls and fining your company?  Would 95% be OK? Or would nothing short of 99.999% be acceptable?  If the latter is the case, the company would be forced to “muscle” this with lots of monitors listening to recorded calls and/or some kind of speech analytics software to check for the appropriate disclosures on every call. Five-9's quality is achievable in call centers but it comes at a steep price.

Net-net, the acceptable error rate in a contact center is what the company is willing to tolerate given the cost of errors and the cost of monitors/training/incentives to eliminate those errors.

Tracking Error Rates

The question about an acceptable error rate for call centers begs another issue:  tracking error rates.  Again, consider the example above, how many call centers would even monitor the error rates around a pricing change say a day, a week, or a month after the process change was made?  If you record every call, you can use speech analytics software to "listen" to the calls and calculate an error rate.  This is an expensive solution and not widely deployed. 

For most centers, the only way to do it is to dedicate someone to listen to 50 calls and estimate the center-wide quality rate from the sample.  Few do this.  Processes are changing all the time in call centers.  You would have to have a monitoring team almost the size of your agent population to monitor agents and track the error rates on all the process changes.  

So no one is really Tracking Error rates except on the most egregious, costly errors.   Because no one is tracking error rates, call centers commit a lot of them.

Driving Improvements

Once you determine your error rate, driving improvements is not easy.  Call monitoring is the same as inspecting in quality in manufacturing, a practice manufacturing abandoned a long time ago:  What the Call Center Industry Can Learn from Manufacturing:  Part II  The only way monitoring can drive increased compliance is if you monitor almost every call, publicly track error rates, and dismiss agents below 95%.  This is a lot of work in and of itself and it would result in a lot of expensive turnover.

A better approach is to use error-proofing and the call center equivalent of Andon lights to make it harder for agents to avoid key steps and to track quality and correct problems real time.  Desk-top consolidation and agent-assisted voice solutions are the best practices here and with these approaches, 99.999% quality is easy to achieve.  Six Sigma/Lean in Contact Centers and Agent-assisted Voice Solutions.

Monday, May 4, 2009

Mass Customization and the Transformation of the Call Center Industry

Call Centers have been around for almost four decades.  And since the first center opened, trying to find a way to raise agent output metrics while keeping costs down has been the #1 issue keeping call center leaders awake at night.  And for the most part, they have relied on coaching to get the job done.  They only problem is, it’s not working. (See The Futility of Call Center Coaching or Sorry, But Your Big Investment in Coaching and Monitoring Will Never Improve Your Output Measures.)

Leaders have wanted to leverage the Continuous Process Improvement tools such as Lean/Six Sigma, but many don’t believe they can be applied to live-agent call handling.  Why?  Because, they assume, there is no process that the agents can follow.  Why? Because, they assume, every call into a call center is unique.

Those who assume calls are unique throw up their hands and believe they can’t define a call handling process because customers call for different reasons….they ask their questions in different orders…they require different levels of explanation….they have different needs for hand-holding and small talk.  They believe that the variation in agent outputs is due to the high input variation.

Speaking of unique, Henry Ford had a unique way of dealing with input variation to his manufacturing process.  He said, “Any customer can have a car painted any colour that he wants so long as it is black.”  In other words, he stamped out input variation to keep his costs down and his factories running smoothly. 

Henry doesn’t live in our world anymore and we don’t live in his. To maximize revenue opportunities, we have to be responsive to as many of the unique needs/wants of our customers as possible.  To do so means we have to design our fulfillment operations to deliver the variation that our customers define as valuable at the lowest possible cost.  In Marketing, this capability is commonly referred to as Mass Customization.

Once car manufacturers realized they could not get away with just offering black cars, how did they respond?  They noticed that customers don’t want to vary everything.  Customers care about the color, the stereo system, sun roofs, and performance wheels.  They don’t care about bolts and axles.  When we compare one Toyota Corolla to another, much of each car is exactly the same (mass), but certain aspects of each car are unique (customization).  Also, the bolts and many sub-assemblies in a Lexus are the same ones used in a Corolla.  In other words, many parts are also shared (mass) across models (customization).

The benefits of mass customization are obvious:  you give your customers more of what they value so they keep coming back to you, while simultaneously raising the quality and lowering the costs of fulfillment.

Re-visioning the input variation in arriving calls as a mass customization opportunity opens up new solutions.  Yes there are many different types of calls, but for a given type of call, aren’t large swaths of those calls exactly the same?  Can’t we standardize those parts and just vary what the customer wants/needs us to vary?  As mentioned, car buyers care about color, not about bolts.  Similarly, customers want to talk to a live agent or get something unique about their situation addressed or they want some human empathy.  We should absolutely try to deliver that.  Do they care how a required disclosure is provided to them?  (Sotto voce:  They don’t.) 

The reason that it is so essential to start seeing the opportunities for mass customization is because to not see them, leaves us where we are today:  each incoming call is as unique as a snowflake, no process is defined for the agents to execute, and the call is riddled with sub-optimizations: 
  • Don’t automate the greeting to ensure it is branded correctly every time; hope the agents aren’t so tired and bored that they mess it up. 
  • Don’t prerecord the disclosures; hope the agents read it word-for-word without accent issues interfering with customers’ understanding. 
  • Don’t use technology to ensure the right cross-sell offer is made at the right time every time; hope your fancy variable comp plan counteracts the unyielding pressure we put on the agents to reduce their talk time. 
  • Don’t error-proof the step reminding the customer to “remove any software before returning the unit” so that it can’t be skipped; besides, the angry letters and calls from customers to the CEO about their missing software go to another department. 

Listen to a few calls a month.  Try to stem the agent variation tide with occasional coaching.  Wish the agents the best when they leave in less than a year, while you look for replacements.  Lather.  Rinse.  Repeat.

Agent-assisted voice solutions give call centers the platform to be able to deliver mass customization.  Calls are broken down into call types.  A process is 1) defined for each call type…exactly what you want the agents to do in their systems and say to customers, and 2) built using pre-recorded audio files and pre-programmed system actions.  The agent executes the process, varying it only as they need to because of something the customer says or needs, as opposed to varying everything, every time. 

The results?  Quality goes up because the agents are executing the process you gave them…no skipped steps, no accent issues, right cross-sells.  If the customer needs something unique, the agent on the call delivers it.  While service is improving, costs are going down because you are engineering the call and every agent is executing an engineered process.  In other words, you are delivering mass customization and deriving the same benefits.

The exhortation to “Think outside the box” lies somewhere between bromidic and boring, but there is real truth in it:  how we frame a problem does drive how we try to solve it.  Is every one of those millions of calls you are expecting to get this year unique? Is training the agents and hoping they get it right the best you can do?

Or are you sitting on a massive, untapped opportunity to mass customize…to give your customers more of what they really want while increasing the quality and reducing the cost of that fulfillment?

Your call.

Tuesday, April 28, 2009

Why is calling into a call center so often infuriating?

An article that appeared in the WSJ in October of 2006 was the inspiration for this blog.  The article was entitled, "If you want to scream, press... Do call centers have to be so infuriating?"  The article suggested that the answer was no and talked about ho-hum, same as it ever was technology that was supposed to make it better.   If it has improved, I haven't noticed. 

What the article did not adequately explore is why is it so infuriating?

There are several reasons.  First, there is the IVR which asks you to press this number and that number.  Sometimes that works, but more often than not, that system makes you want to pull your hair out because the choice you are looking for is not given or you get trapped and cant get out.  That is why sites like Dial a Human were created.

Second is the fact that you have to keep repeating or reentering information you have already given.  Companies are trying to solve this problem, but it is still all to often that you enter your account number and have to repeat it multiple times.

But the real reason calling a call center is so infuriating is because of the person you are talking to.  There are a host of reasons the agents make you want to pull your hair out:  you can't understand them because of their accents,  they were not screened carefully enough, they are new, they have not been well trained, or they were trained well but they forgot what they were supposed to do, or they don't care or they are burned-out, tired and frustrated.  Managing your Human Sigma reports on a study of 5000 agents which showed that the quality of the customer's experience was a function of the agent that picked up the phone:  get a good agent and you get a good experience, get a bad agent and buckle up.  

Now , I am not really picking on the agents.  That would be like saying the poor quality of cars coming out of Detroit in the 70s was because of the workers.  Yes, they might have had something to do with it.  But the real issue was the car design and car manufacturing process.  

This poor experience we too often have with call center agents is a management problem:  it is well known, it has existed for decades, and it is fixable.  They have tried to fix it, mostly through monitoring and coaching agents.  But if monitoring and coaching were effective solutions, this problem would have been fixed by now and calling into call centers would not be so maddening.

As I said, this problem is fixable.  And that is what this blog will be about:  how call centers can change the tired game they have been playing for almost four decades by rethinking assumptions, stealing best practices from manufacturing and leveraging technology.